Dubai Stocks Climb Most in a Month After Emirate Wins Expo 2020

Construction cranes are seen on a building site alongside skyscrapers near to Dubai Marina in Dubai. Dubai beat Turkey’s Izmir, Russia’s Ekaterinburg and Brazil’s Sao Paulo in a vote organized by the Bureau International des Expositions in Paris. Photographer: Jason Alden/Bloomberg

Nov. 28 (Bloomberg) -- Dubai’s benchmark stock index surged
the most in more than a month after the emirate won the right to
host the World Expo 2020.

The DFM General Index advanced 1.6 percent, the most since
Oct. 20, to 2,945.91 at the close, bringing the gain for the
year to 82 percent. The measure soared as much as 4.2 percent
during intraday trading. Dubai Investments PJSC, which holds
stakes in more than 40 businesses, increased to the highest in
five years and Union Properties PJSC, rose for a second day. Abu
Dhabi’s gauge added 0.3 percent.

Dubai, which teetered on the brink of default in 2009, will
invest almost 6 billion euros ($8.1 billion) on infrastructure
projects ahead of the Expo, Sheikh Ahmed bin Saeed Al Maktoum,
head of Dubai’s Supreme Fiscal Committee and chairman of
Emirates airline, said Nov. 17. HSBC Holdings Plc estimates
government and private expenditure will reach 67 billion dirhams
($18.2 billion) in the run up to the Expo.

“That catalyst has been realized,” Digvijay Singh, head
of Middle East equity strategy at VTB Capital in Dubai, said by
phone. There could be some selling pressure next week as
investors look to book profits, he said.

Dubai beat Turkey’s Izmir, Russia’s Ekaterinburg and
Brazil’s Sao Paulo in a vote organized by the Bureau
International des Expositions in Paris. The emirate, whose
economy is rebounding as its hospitality and property industries
flourish, plans to attract 25 million visitors during the six-month event starting Oct. 20, 2020.

Expo Site

Dubai’s economy may grow 6.4 percent on average over the
next three years and potentially 10.5 percent annually to 2020,
Barclays Plc said in a Nov. 26 report. Bank of America Corp.
said in September the Expo may boost GDP by 0.5 percentage point
annually and 2 percentage points in 2020.

The yield on Dubai’s 5.591 percent bond maturing in June
2021 declined three basis points, or 0.03 percentage point, to
4.23 percent at 6 p.m. in the emirate.

Shares valued at 1.5 billion dirhams traded in Dubai today
compared with a one-year average of 562 million dirhams.

Dubai Investments gained 3.5 percent to 2.38 dirhams and
Union Properties, the emirate’s smallest publicly traded
developer, rose 2.6 percent to 97.5 fils. The shares were the
most traded on Dubai’s benchmark index as both companies have
assets close to the site that will be developed for the Expo,
said Talal Touqan, the head of research at Abu Dhabi-based Al
Ramz Securities.

The Expo will held on 438 hectares close to the new Al
Maktoum International Airport that’s equidistant from Abu Dhabi,
the capital of United Arab Emirates, and central Dubai.